Walmart targets supermarkets

I grew up with the habit of reserving Thursday nights for family shopping at the local supermarket, and always assumed, for good or ill, that stores dedicated to edibles were a permanent part of city landscapes.

But don't count on it. Old-style supermarkets may be on the way out; the concept of a grocery store that mainly sells food could become as obsolete as the notion of a box store or gas station that doesn't.

Beginning this month, Walmart Canada kicks off its one-year plan to add 40 new supercentres to today's 124, some of them smaller stores in urban centres. Anticipating this expansion, Loblaws is already well along in its transformation to a general merchandise superstore.

Other pharmacy and general merchandise chains like Shoppers Drug Mart and Target in the U.S. are on the way to becoming heavy hitters on the food scene. (Target takes over 220 Zellers leases in Canada; the percentage of its food offerings is unknown.)

A 2009 StatsCan study argues that Canadians have been much more reluctant than U.S. consumers to get their groceries at the same time as they're buying sweaters or blenders. But are we on the cusp of joining the south-of-the-border march to general merchandise stores?

This transformation of an industry on which Ontario's health, food security, jobs and economic security are dependent could continue one megastore at a time. Alternatively, some farseeing politician could say that this change is too momentous to be driven by short-term profits for a few corporations.

The only major North American political figure to weigh in so far is U.S. First Lady Michelle Obama. But how she did it is more a warning than a lesson. Obama joined Walmart in its January 20 launch of a bid to position itself as a responsible grocer to the world. In doing so, she put the prestige of the White House behind the global giant by endorsing its new line of products, which the company claims will boost access to nutritious foods.

A corporate chain that can pull off that level of celebrity endorsement is a sign that all previous standards of political independence in a democracy no longer apply.

Walmart will reduce salt and sugar in the processed foods it sells by 10 per cent over the next four years, make nutritious eating more affordable by slashing a billion dollars from overall costs of "better-for-you" food choices, develop strict measures for a standard good-for-you seal to be placed prominently on food packages and build stores in low-income areas.

In keeping with the Obama approach to food regulation, private corporations are given the authority to both decide and certify what is safe and healthful, and to set the price level for ostensibly more nutritious foods. Meanwhile, the U.S. government subsidizes cheap carbs and high-fat animal products to the tune of about $20 billion a year.

And giving one box store operator the presidential okay to set up food stores in low-income urban areas comes at a time when Walmart and other big boxes face resistance from small businesses and local groups.

Watch for the company to find more urban locations in Canada. Big store or smaller, Walmart will continue its efforts to force the price of agricultural products down to the danger point.

But the supercentre trend is even bigger than Walmart. Food is a high-volume, low-margin retail business, which is why we get Joe Fresh and other food merchandisers' moves to sell track suits, jeans and TV sets. On the other side, food brings in traffic, and traffic means impulse buying, a pressing concern in a recession where there is shrinking purchasing power.

This is fateful enough, but Canada has one of the most monopolized food retail sectors in the world - one national chain, Loblaws, and a few other major regional players.

The prospect of even further dinosaur-style corporate concentration is bad news for responsible enviro innovation, not to mention the resilience of particular places that function best economically when eggs are spread over many retail baskets.

The urban supercentre, not yet a foreordained reality, is a choice yet to be finalized. But not for long.